Global environmental sustainability: the role of economic, social, governance (ECON-SG) factors, climate policy uncertainty (EPU) and carbon emissions

Raising ESG standards and reducing climate policy uncertainty can directly determine CO₂ emissions. Therefore, this study examines the effects of economic, social, governance (ECON-SG), and climate policy uncertainty on CO₂ emissions (CO₂E) on a global scale from 2001 to 2020. The ARDL and ARDL bound tests are employed. The F-statistics suggest a stable long-run relationship among the variables, indicating that the estimated coefficients are robust. Empirical findings reveal that while economic factors increase CO₂E, social factors mitigate. Based on these results, the interactions of economic, social, governance, and climate policy with global (total) environmental problems can be interpreted as follows. (i) Energy consumption driven by global economic growth and industrial production based mainly on fossil fuels increases CO₂E. This result may also indicate unsustainable economic growth. (ii) Despite unsustainable global economic growth, increasing social awareness, education level, and life expectancy can be interpreted as improving society's environmental awareness and reducing CO₂E. Therefore, policymakers must harmonize their global economic and social policies conflicting with CO₂E. In fact, this result may indicate that economic growth that does not support and develop social policies cannot positively contribute to the environment because the ultimate point of economic policies and growth is people in social life. (iii) The insignificant impact of climate policy uncertainty on CO₂E can be interpreted because of an international lack of coordination in global climate policies.